We import our furnishings, clothing, electronic appliances, and children’s toys from China. And that’s just the shortlist. But what’s next? Probably wine.
Last year, China became the second largest cultivator of wine grapes in the world after Spain. The country is now ahead of France, Italy, and the U.S. with vineyards occupying more than 3000 square miles of land, mostly all red wine grapes and mostly French varietals. Americans consume the most wine, both white and red. But the Chinese are the largest consumers of red wine in the world. When they discover whites, the numbers will be staggering.
But right now, Chinese wine production is much less than major wine-producing nations because many of their vineyards are new and not yet ready for wine making. But that will change in several years. At this point, the Chinese are importing half of what they consume,the better half. Their own vineyards are relegated to lower value wines. But that too will change. Making fine wine requires a learning curve as Chile, South Africa, and California will testify.
The Chinese enthusiasm for wine, red wine,started about 15 years ago as a burgeoning middle class began to develop. The newly affluent and urban Chinese were brand conscious,and wine, red and French, was a symbol of sophistication. The French embraced these new consumers and marketed their wines there but also invested in China. The Great Wall Wine Co. was built in part with French capital and equipment. Remy Cointreau invested in Dynasty Wines. Great Wall, Dynasty, and Changyu, a domestic company,are the big three of Chinese wine with combined revenues of about eight billion dollars. Not bad for a beginning.
But the French went even further. Rothschild planted a 37-acre vineyard in Penglai, a peninsula of Shandong. LVMH Moet Hennessy planted 163 acres in the province of Ningxia along with 74 acres in Yunnan, further reinforcing their brands.
China has almost 20% of the world population,1.3 billion people, and it doesn’t need to export wine to develop the biggest wine business in the world. All it needs is to satisfy its own markets. And right now, that’s the goal. But after it accomplishes that task and improves its wines, we might be seeing Chinese wines at our corner stores for irresistible prices.